Three insiders have indicated that the Bank of Japan (BOJ) could raise interest rates as soon as September, and is considering accelerating the pace of tightening beyond the current rate of roughly two increases per year.

This move reflects growing concerns at the BOJ over price pressures stemming from the Middle East conflict, robust global demand for artificial intelligence, and the ongoing depreciation of the Japanese yen, which has persisted despite rare joint intervention by the U.S. and Japan last month.

"An early rate hike is a foregone conclusion," said one source, suggesting the BOJ is highly likely to raise rates at its next policy meeting on September 17-18.

Another source expressed a similar view, adding, "The BOJ may also speed up the pace of rate hikes."

Since ending its massive decade-long stimulus program in 2024, the BOJ has been raising rates at a pace of about two hikes per year, including a move in June that brought the rate to 1%, its highest level in 31 years.

Although the BOJ held policy steady last month, it issued its strongest signal yet that a rate hike could come early, warning that rising price pressures could push underlying inflation above 2%.

A summary of opinions from the July meeting showed that some BOJ board members called for faster rate increases to avoid falling behind the curve on inflation.